Akinwunmi Ambode the governor of Lagos has taken the business readiness of the state to a new level with his Land Tenement Rates and the new increase, though still open to deliberations and negotiations. One thing with this law is that if it eventually gets a nod from the "Duke" of Lagos, businesses would leave Lagos and Lagos would lose the critical funds they intend to get.
Residents are demanding reversal of the increase in Land Use Charge, LUC, slammed on land/building owners by in Lagos by administration of Governor Akinwunmi Ambode. At the vanguard of opposition to the new rate are opposition political parties, residents of highbrow estates in Lagos, business and professional associations. The Organised Private Sector, OPS has already indicated that it will resist the review which it said has led to 200 percent increase in Land Use Charge.
On its part, the Nigeria Bar Association (NBA), Ikeja branch, expressed displeasure at the new charges which it argued will lead to further impoverishment of over 17,000,000 Lagosians.
NBA maintained that the poor economy of the country is already negatively affecting the people while urging the governor to be sensitive in implementing policies that would gravely affect the residents of the state.
Lagos, the hot pot of Nigeria's economy by the virtue of having a seaport and the robust international airport has always been in the news. Some news is good and others not so good. The ease of doing business in Lagos is one hell of a thing and with many agencies and taxmen available, one must always find ingenious means to do business in this jungle called Lagos
The State Is Offering What I Don't Know For Investors . In Lagos It Is All About Pay , Pay And Pay And The Question Is What Are These Money Used For ? We Have Seen Beautification Of Streets, But We Haven't Seen The Removal Of Touts From The Streets That Would Enable The So Called Beautification Take Place.
"It is clear that if these regimes of tax are allowed to stay, Lagos state would have been turned into a toxic environment and a living hell. Even ordinarily in Lagos state, accommodation is only cheap and easily affordable i.e. for those who have the parks and under the bridge to sleep and dwell."
"Now, the question is this, those who are having commercial properties, the rental income they were getting in 2002 as against the rental income they are getting in 2017, is it the same? The issue is this, the level of infrastructure that existed in 2002 as against what has happened in the last 15 years, are they the same? Did it not come at a cost? So, why is the market value of the property that you built with one million, 15 years after, you are selling at N20 million?
"Why do you think somebody who is a buyer will pay N20 million for it? Is it not because of the facilities around the property? So, we have to sacrifice; that is how it works everywhere. So, somebody comes and say we have increased by 400 per cent. The question is, the 400 per cent of what? You were paying N10,000 before, now we say you should pay N50,000 and you are calculating and turning statistics upside down by saying it is 400 per cent. Is it not still small?" Ambode asked while justifying the increase in LUC.
"But do you know the truth? Pensioners don't need to pay. Owner-occupiers is just 0.67 per cent. For churches, mosques, NGOs, government institutions is free. So, who is the one that will take care of those that are free? If you are owner-occupier, you don't need to pay. So, it's the commercial part that people are complaining about.
"Why have we increased? We should have been doing this every five years but I am looking at it, if I must sustain the level of my vision, I have to give something back to people. I don't have to come and meet you if we are borrowing money. But we are ready for dialogue, that is the sacrifice,"
Coming to doing businesses in Lagos, the ease of doing business in Lagos can be likened to the ease a camel would use to pass through the eye of a needle. That's how Lagos can be out into place, with tons of bottlenecks from land acquisition, rates, tax, agencies, touts and periodic harassments by government and non government official couples with inconsistency in government policies... you would understand that doing business in Lagos requires special skills and one of these skills is to "lay low" and avoid paying some rates, though not right for any business to survive, what is right or wrong should be left for moralist, not businessman. So, some rates and even taxes would be dodged and this is a loss of critical funds to Lagos and in some cases capital flight to some states.
Lately, Lagos is planning to increase the cost of documentation of cars. Now the loss of revenue to the state is better imagined. Lagos State to increase the cost of Road Worthiness, Private cars to pay up to 3,850 and SUVs to pay up to 4,600. Now can somebody tell me why wouldn't I take a stroll to nearby Ogun state and have my car papers done, by the way, Abeokuta in Ogun state isn't up to 30 minutes drive or when I go to East or any part of the country during the cause of business travel utilise that time to have my papers done! As you can see the loss to Lagos would be there!
You know with the advent of technology people can do business anywhere....all you need is a virtual office. I have witnessed and seen many firms with offices in far north but 80 percent of their customers are in Lagos ...even Ogun state is taking firms away from Lagos...when you ask these firms why not in Lagos...they would tell you that Lagos kills business and that is a fact. The Latest Ogun State advert in Lagos has this maxim "Pay Tax Where You Live".
Lagos is one city that kills any business and that is why many firms in Lagos don't even have a signpost, they would not want Lagos to come with their overtaxing "wahala" and also signpost issue. They have come to understand that Lagos is one huge monster that would stifle any business....to succeed as a startup in Lagos, you have two options, lay low and don't you ever open an office with a signpost or work from a distance. Failure to do these you would have Feds, the Lagos State revenue, the business premises registration, the local council, the guys asking for borehole clearance if you have mast the monster of an environment and all manner of agencies.
Smart alecs and folks understand this and they have found ways to go around this situation by either operating in a residential environment with no signpost or take the business out of Lagos State and make money from Lagos State. This is what Lagos has done and is doing.
I am thinking that Lagos doesn't understand the concept of tax holidays for start-ups and tax exemption is a foreign concept, with Ambode increment of so many things which include the Tenement Rates, one thing I am sure of is this, business would relocate, online-based SMEs would find ways to go about the rates. A company can move its headquarters or operational base from Lagos to Ogun or Abuja but still maintains their customer base.
Countries and many regions of the world like Switzerland, Luxembourg, Namibia etc attract investment by offering the great environment, great infrastructure, and good tax systems but as it stands with Lagos, the state is offering what I don't know for investors. In Lagos it is all about pay, pay and pay and the question is what is this money used for? Though we have seen this Government demonstrate efficiency and capacity in the area of INFRASTRUCTURE We have seen beautification of streets, but we haven't seen the removal of touts from the streets that would enable the so-called beautification to take place. With Ambode at the helms of affairs of the biggest economy in Nigeria, we hope that the Land Use Act that is in the offing or being considered will not break the will to till in Lagos.